Merkel spoke to reporters Tuesday in Hanoi after meeting with her Vietnamese counterpart, Prime Minister Nguyen Tan Dung, as part of a two-day visit to boost trade ties with the communist country.

"Eurozone countries have the political will to overcome this public debt crisis. The root of the problem is problems with the banks," Merkel told reporters in remarks translated live from German to Vietnamese.

Compared with Vietnam and other countries with young populations, Merkel added, European countries will face greater challenges as they try to reduce their public debts.

Slovakia's parliament is expected to vote Tuesday on whether to expand a bailout fund designed to rescue heavily indebted European nations. The vote has global implications because Slovakia and the 16 other nations that use the euro must all approve the package of measures agreed by eurozone leaders in July.

Sixteen of the nations, including Germany and France, have already given approval.

On Sunday in Berlin, Merkel and French President Nicolas Sarkozy promised to finalize a comprehensive response to Europe's debt crisis by the end of the month. But in Hanoi on Tuesday, Merkel offered no details on what that response may look like.

Merkel and Vietnamese Prime Minister Nguyen Tan Dung signed a "strategic partnership" agreement similar to ones Vietnam has signed with seven other countries including China, Russia, Japan and South Korea.

Speaking at a joint press conference, Dung said there is room for the two countries to expand their trade, which stood at US$5 billion last year.

Germany is Vietnam's largest European trading partner. Vietnam's bilateral trade with China and the United States, respectively, stands at more than US$30 billion and more than US$20 billion.

But the U.S. and the European Union often criticize Vietnam for imprisoning bloggers and activists who challenge the single-party government's authority.

"Developing human rights as well as religious freedom and freedom of the press is very important," Merkel said.

Accompanied by a German business delegation, Merkel will also visit Ho Chi Minh City where she will attend a business forum.

She is scheduled to depart Vietnam later today and travel to Mongolia.